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By the Numbers

In our Facebook groups, we get asked a lot of the same questions over and over and I thought much of this is scattered throughout my blog, it can be hard to find. Thus, here is a short blog about typical expectations and standards in your tabletop hobby game industry.

Meaning of terms:

Markup means what you add to your costs to sell a game. That is typically 100%. In other words, doubling the price you paid for it. This is also known as Keystone pricing. This is a common markup for many industries.

Margin means what you make on selling a game. That would be roughly 45-50% if you don’t take other expenses into account.

Profit is how much money you keep after bills and staff, rent, insurance, shipping, and all that stuff are paid for. That is very typically going to be under 10%. A company can survive just fine on anything over 5%. 8-10% is considered healthy.

NET Pricing is where a publisher is forcing a fixed price (usually cause they have the demand/market share to do so) and thus it’s not usually looked at as a % of MSRP. Typically this is in cases where the distributor is paying more than normal and thus the retailer is going to as well.

Gross Revenue is the total amount of sales (money earned) before taking out expenses.

A distributor typically pays 40% of (or 60% off) MSRP for a game they get from a typical average publisher.

A retailer will typically get a game from a distributor for about 45-50% off MSRP. Most retailers will sell at MSRP but some will just use Keystone pricing (doubling their cost).

A retailer (usually online) that is considered a “deep discounter” and disruptive in the industry are those that sell things for 20-30% off MSRP. They do this usually cause they are not paying a lot of rent and/or staff and they obviously don’t run events and support play space in a store, etc.

To help fight against the devaluing of their products, Publishers will use a MAP (Minim Advertised Price)contract with buyers to prevent people from getting their games unless they agree. They will typically allow a small discount on a regular basis and a larger one on short term sales.

Working with all the above math, for a publisher to even make a little money they will typically have to price their game’s MSRP at 5 times the cost of production and shipping to their local warehouse. So that’s where that number (and the 20% thing) comes from.

NOTE FOR EU: the above mainly pertains to USA distro and retail. EU tends to do a lot more direct purchasing but here are some numbers I got from a fellow publisher:

A Publisher gets a net 40% of the net of vat price from distributors. So assume an rrp of £100 your net of vat is 100/1.2 or £83.33. The distributor will give you 40% of that or £33.33.

A Retailer would give you approx net 60% or £49.99.

These numbers are generalizations and can vary a bit, but good for a guideline:

Typical Numbers:

1% = the number of packages/games you should expect to get damaged. lost, or have flaws for reshipping

1% = the number of backers you can expect from a large broad mailing list

5-6% = the royalty of Gross Revenue a game designer can be expected to receive (2-3% MSRP)

5x = the minimum multiplier of your production cost (plus shipping to your warehouse) you use to figure out MSRP

7 = the number of “touches” you need to make a sale

9 = maximum number of rewards you should be offering in a Kickstarter

10% = pledge cancel rate on Kickstarter in 2018

15% = average conversion rate for a campaign specific mailing list

15% = additional sales you can expect when using a pledge manager

18% = what a consolidator typically charges of your wholesale sales (works out to about 10% of MSRP)

30% = amount of backing a good campaign can expect during the first 2 days, the last 2 days, and the middle.

50% = the discount a Retailer will look at buying your game for

60% = the discount off MSRP that a Distributor will purchase your game at

65% = typical % of backers living in the USA.

1000 = the number of games you should print over the total you sold in Kickstarter for post-KS sales if you plan to go to distribution

1500 = minimum number of units you should make of a game to not waste money

$300-500 = typical amount to purchase wholesale to get free shipping form a publisher or distributor

$3000 = average cost of a mold for miniatures or dice (each mold can hold 4-5 unique items)

You can laser etch dice and use other methods for custom dice. But yeah, a mold for a die (or 5 or 6 different dice which will all fit in one mold) would be in the $1500-3000 range. Used to be much worse than that!

Thanks James, very informative as usual, your back hitting the sweet spot the same week as tiger. I assume the $3000 refers to tooling costs associated with injection moulding if you or any other readers have recent experiences in mass miniature production, I would love to know more detail on the options. I will post a related topic in the FB group so as not to distract this comments section. Thanks again for all the Information.